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Tax Credits Claimants Reminded to Renew it or Lose It Print E-mail
Written by HM Revenue & Customs   
Tuesday, 03 June 2014 00:00

Tax credits customers are being prompted, through an advertising campaign launched today, to renew their claim now.

HM Revenue and Customs (HMRC) is sending out 5.8 million tax credits renewals packs which will arrive by 30 June. Over 3 million of these claims need to be renewed before the deadline for claimants to continue receiving tax credits. Last year some 650,000 claimants had their money stopped because they did not renew by the 31 July deadline.

Claimants must tell HMRC about any changes to their circumstances that they haven’t already reported, including changes to working hours, childcare costs and income, or if a partner has moved in.

This year, as well as being able to renew by post and by phone, claimants with no changes to report are also able to renew online, via GOV.UK.

Nick Lodge, HMRC’s Director General, Benefits and Credits, said:

"People should check their details and renew early to make sure they get the right money. Don't leave it – people who don't renew on time risk losing their payments."

Before checking their form or calling HMRC’s Tax Credit Helpline, claimants are urged to have the right documents to hand, for example, payslips, end of year P60 forms and childcare payment details.

The advertising campaign runs throughout June and July on radio, television, bus shelters, and via a mobile app, Spotify and video on demand.

Claimants can get help and information on tax credits renewals from:


telephone: Tax Credits helpline – 0345 300 3900 

Industrial Buildings Allowance Claim Fails at Upper Tribunal Print E-mail
Personal Taxes
Written by Lee Sharpe   
Tuesday, 03 June 2014 00:00

HMRC has publicised that it has been vindicated at both the First Tier and now the Upper Tier Tribunals, in refusing Industrial Buildings Allowance (IBAs). (Next Distribution Ltd. & Others v HMRC [2014] UKUT 0227 (TCC))

While IBAs were abolished some years ago, at a time when the relief was available the retailer Next (under Next and Paige Groups respectively) had attempted to claim some £19million in expenditure on two premises it used for logistics - the taxpayer claimed that the buildings were involved in subjecting goods to a process, that the goods were stored there preparatory to the goods’ being subjected to a process (breaking down bulk shipping consignments into smaller parcels) and/or were being used to store goods on their arrival to the UK from overseas.

The tribunal held that, while the buildings were (of course) used to store goods, the goods themselves were not subjected to sufficient a process , etc., and that the goods had “arrived” to the UK long before they ended up in the taxpayer’s warehouses, which was many miles inland from delivery. The case was long in the reporting and there is much detail. Many readers will recall how tortuous was the IBAs legislation and its subsequent interpretation by the courts.

The decision of the FTT is at Next Distribution Ltd. & Others v HMRC [2012] UKFTT 405 (TC)

The taxpayer appealed against the First-Tier Tribunal’s decision, but it was upheld by the Upper Tribunal – although the reasoning changed a little, and HMRC’s case was not approved on all points.

The Upper Tribunal’s decision is at Next Distribution Ltd. & Others v HMRC [2014] UKUT 0227 (TCC)

HMRC has been quick to publicise its victory in this latest turn and seems intent to cast the taxpayer in a poor light, with Jim Harra, HMRC’s Director General of Business Tax quoted as saying,

“This case shows that, when any business – large or small – tries to claim capital allowances beyond their scope, HMRC will challenge it, including through the courts if necessary.”

HMRC’s press release also asserts that this decision “safeguards about £2.8 million of revenue”.

Whlie the taxpayer hardly needs TW to speak in its defence, we think it appropriate to question the manner in which HMRC has reported this case. The language is not dissimilar to that reserved for “artificial” schemes which are perceived to have little economic basis other than to reduce tax. Simply put, the taxpayer constructed two large buildings – at substantial cost – in which some fairly complex operations were undertaken – a “genuine” economic activity. The taxpayer seems to have held a quite reasonable belief that it was entitled to tax relief on a good part of that expenditure. The tribunals – both of them, to be fair – have upheld HMRC’s view that relief was not available.

While HMRC is of course right to publicise the limit of IBAs, it is questionable whether the tone of its report serves an aim in the public interest, or effectively tries to dissuade taxpayers from making what one might loosely term “reasonably believed” tax claims in respect of “genuine economic activities”. 

Tribunal Tears Up Next’s Tax Relief Claim Print E-mail
Personal Taxes
Written by HM Revenue & Customs   
Monday, 02 June 2014 00:00

A multi-million pound tax allowance claim made by one of the UK’s largest clothing retailers has been rejected for the second time by a tax tribunal.

Next Distribution Limited, part of the Next Group Plc, claimed Industrial Buildings Allowance (IBA) on £19 million it spent on constructing two buildings used for warehousing and other activities.

Under the now-defunct IBA, businesses could write off some of their construction costs if the sites being built were used to subject goods to a process or to store goods on their arrival in the UK.

HM Revenue and Customs (HMRC) refused Next’s claim for the allowance on the grounds that unpacking bulk deliveries and repackaging them in smaller packages was beyond the scope of the allowance. The company’s appeal against the decision was dismissed by a First-tier Tribunal and that decision has now been upheld by the Upper Tribunal. This decision safeguards about £2.8 million of revenue.

Jim Harra, Director General, Business Tax, HMRC, said:

“HMRC’s decision to reject Next’s claim for this tax relief has now been backed by two tribunals.

This case shows that, when any business – large or small – tries to claim capital allowances beyond their intended scope, HMRC will challenge it, including through the courts if necessary.”

HMRC Announces New Agent Dedicated Line for Debt Management and Banking Print E-mail
Written by HM Revenue & Customs   
Monday, 28 April 2014 00:00

We are pleased to tell you that a new Enforcement & Compliance, Debt Management & Banking (DMB) Agent Dedicated Line opens on 28 April 2014.

This helpline is intended for the sole use of agents with queries about DMB – and you can use it to get a priority service.

The telephone number is: 0300 200 3887.

Opening hours:

8 am to 8 pm, Monday to Friday. 

RTI One Year On - HMRC Briefing Print E-mail
Written by HM Revenue & Customs   
Thursday, 10 April 2014 00:00


All employers now need to send payroll information in real time. This is known as Real Time Information, or RTI, and has been fully operational for a year. Virtually all individual PAYE records are now routinely reported in real time, with the majority of employers finding RTI easy and reporting on time without any problems. This briefing explains the benefits that employers, HMRC and the Exchequer will experience as a result of RTI and how we are supporting employers as they get used to the new way of reporting.

1. Why We Changed the Reporting of PAYE Information

The PAYE system had remained largely the same for the past 70 years, though employment patterns had changed markedly, with millions more people changing jobs every year, or having more than one employer. This made it more difficult for us to keep an individual’s employment record up to date.

Reporting PAYE information in real time means employers send us PAYE information every time they pay their employees, rather than at the end of the tax year. This makes PAYE quicker, easier and more accurate. The new system benefits employers, employees and the Exchequer.

Employers have seen an immediate benefit from simplified reporting requirements for employees who join or leave during the year. RTI will also help us to improve the accuracy of tax codes during the year; employees will also benefit, as fewer will need to pay additional tax at the end of the year, and any overpayments or underpayments will be smaller in value. The most significant saving for employers is expected to come at the end of the tax year, since they will not need to complete an annual PAYE return.

RTI also benefits the Exchequer, speeding up the collection of the billions of pounds that we estimate are owed by employers at any one time. We also use RTI to help reduce losses from tax credits overpayments error and fraud, and from April 2014 RTI data will be used to speed up the renewals process for around 1.7 million tax credit claims. This will save the customer having to report this data to us and ensure the award is calculated using accurate information helping to reduce over and under payments.

2. Support for Employers

The move to reporting PAYE information in real time is a huge change and we know that some employers need more time to adapt. We have worked with a number of groups and organisations that support or represent employers to help them make this change.

As part of this, we introduced a temporary relaxation in April 2013 to give small employers more time to adapt to reporting RTI ‘on or before’ the date of payment. This relaxation came to an end on 5 April 2014. We are also:

  • enhancing our IT and improving our guidance as we continue to fine tune our systems
  • reminding those employers who should have been reporting PAYE in real time, but who have not yet started, highlighting the range of support available on our web pages, including guidance, YouTube videos and live and pre-recorded webinars (on-line seminars)
  • introducing a support package for micro-employers with nine or fewer employees to give them more time to adapt to the new way of reporting. This package also includes improved guidance, including best practice scenarios and ongoing work with the software industry to develop new ways to report PAYE information, for example by using mobile apps.

We have also helped employers through our approach to compliance. During 2013-14 there have been no in-year late filing penalties for RTI while employers and HMRC get used to the new way of reporting. Our original intention, following a full consultation, was to introduce the new automated penalties for late payment and late filing from April 2014.

Having listened to customer feedback about giving employers, our staff and systems more time to adapt, we are staggering the start of employers being charged a new penalty if they pay or make a submission late. The late filing penalties start from 6 October 2014, and the late payment penalties start from April 2015. Until the new penalties are introduced, we will continue to charge penalties as we do now.

The majority of employers pay on time and, to support the collection of money that is genuinely owed by employers, we began introducing in-year interest on late-paid payroll taxes from 6 April 2014.

This will give those employers who need it, including those employers reporting in real time from April 2014 for the first time, more time to adapt. It will also enable us to make sure that the improvements are working properly and provide better customer support to employers who need more time to adapt. These improvements include:

  • the introduction of the new ‘late reporting reason’ – so an employer can tell us if they have a good reason to report late
  • new internal safeguards, such as enhancements to automatically correct some types of common employer errors.

3. Employer Final Submissions of the Year

Now employers are reporting in real time, they don’t need to send us a P35 or P14 at the end of the tax year. Instead they just send their final real-time PAYE submission as normal and answer a few extra questions. The same time limits apply, so most employers should send their final submission on or before the date of their last employee payment in the tax year (or by 19 April if they are sending an Employer Payment Summary). Employers’ payroll software will tell them whether their submission was successful, so there’s no need for employers to contact us to ask whether we have received their submissions.

4. RTI and Universal Credit

RTI supports Universal Credit by providing the Department for Work and Pensions (DWP) with up-to-date information about claimants’ earnings from employers and pensions that are subject to PAYE, enabling DWP to calculate Universal Credit payments monthly, without the need for claimants to supply this information.

5. Employment Allowance

From 6 April 2014 employers have been able to claim Employment Allowance through their normal RTI submission using payroll software or our Basic PAYE Tools. Eligible employers may receive up to £2,000 off their Employer Class 1 national insurance bill each year by claiming the Employment Allowance.

6. To Find Out More

Visit our website at

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